Renewable power could ‘soon be cheaper than coal’
Wind and solar power plants will soon be cheaper than coal in all big global markets, claims a new report.
The analysis by London-based not-for-profit think tank Carbon Tracker found that 60% of global coal power plants are generating electricity at a higher cost than that which could be produced by building renewable plants. By 2030 at the latest, it says, it will be cheaper to build new wind or solar capacity than to continue operating coal plants.
Previous research by the think tank had found four in five EU coal power plants to be unprofitable already and warned investors and policymakers to prepare for a complete phase-out of coal. Without heavy subsidies, it said, the industry could not survive sustained competition from the ever-lower cost of wind and solar power, and temporarily cheap gas.
Worldwide, 499GW of new coal power is planned or already under construction at a cost of $638 billion, even though global coal use in electricity generation needs to fall by 80% from 2010 to 2030 in order to limit global warming to 1.5°C.
Carbon Tracker’s report suggests that governments and investors will likely fail to recoup these investments in coal, with both the falling costs of wind and solar power and the investment needed to comply with carbon and air pollution regulations making coal uncompetitive in all major markets.
However, governments in many countries such as China, Japan and South Korea continue to support investment in coal power, despite the economic case being made.
According to the report, wind power in Japan is expected to be cheaper than existing coal by 2028, while solar power is forecast to be a better option than new coal by 2023, and existing coal by 2026. In China, wind is already cheaper than coal power, and solar electricity is forecast to cost, on average, less than existing coal later in 2020. Renewable energy in South Korea is set to be cheaper than coal in two years.
Matt Gray, Carbon Tracker’s co-head of power and utilities and co-author of the report, said: “Renewables are out-competing coal around the world and proposed coal investments risk becoming stranded assets that could lock in high-cost coal power for decades.
“The market is driving the low-carbon energy transition, but governments aren’t listening. It makes economic sense for governments to cancel new coal projects immediately and progressively phase out existing plants.”